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CS Professional · Environmental, Social and Governance (ESG) - Principles and Practice · Board Processes through Secretarial Standards

At the AGM of Kaveri Power Ltd, the chairman, Mr. Rao, decides that a shareholder's remark alleging dishonesty against a named former employee is defamatory and omits it from the draft minutes. Under section 118, what is the position?

The omission is valid. Section 118 lets the chairman exclude matter he reasonably regards as defamatory, irrelevant or immaterial, or detrimental to the company, and gives him absolute discretion. Minutes need only be a fair and correct summary of proceedings, not a verbatim record.

  1. AThe omission is invalid because minutes must record every remark verbatim
  2. BThe omission needs approval of the members by ordinary resolution
  3. CThe omission is permitted; the chairman has absolute discretion to exclude matter he regards as defamatory, irrelevant or detrimental to the companyCorrect
  4. DThe omission is permitted only if the Registrar consents

Explanation

Section 118(5) allows exclusion of matter that in the chairman's opinion is defamatory, irrelevant or immaterial, or detrimental to the company's interests. Section 118(6) gives him absolute discretion. Minutes must contain a fair and correct summary, not a verbatim record, so the verbatim option is wrong.

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